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Decommodification of financial regulation : some unpleasant lessons from the 2007 crisis

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  • Faruk Ülgen

    () (CREG - Centre de recherche en économie de Grenoble - UPMF - Université Pierre Mendès France - Grenoble 2 - UGA - Université Grenoble Alpes)

Abstract

The Great Transformation of modern capitalism from the 1980s is the commodification of monetary/financial rules and related regulation. Assuming that free markets result in social optimum, financial liberalization has transformed public regulatory mechanisms into private self-regulation systems relying on market price-directed contractual schemas. In light of the 2007-08 crisis, this article seeks to question this blind faith in the market's self-adjustment capacity. It argues that free markets and individual rationality-based economic efficiency cannot result in social harmony. It maintains that financial stability should not be entrusted to the vicissitudes of markets. It then suggests the decommodification of financial supervision through alternative public regulation that seeks social-stability and economic viability.

Suggested Citation

  • Faruk Ülgen, 2015. "Decommodification of financial regulation : some unpleasant lessons from the 2007 crisis," Post-Print halshs-01111178, HAL.
  • Handle: RePEc:hal:journl:halshs-01111178
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01111178
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    File URL: https://halshs.archives-ouvertes.fr/halshs-01111178/document
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    1. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2006. "Bank concentration, competition, and crises: First results," Journal of Banking & Finance, Elsevier, vol. 30(5), pages 1581-1603, May.
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    Keywords

    crisis; decommodification; liberalism; social efficiency; financial regulation;

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